July 13, 2017 / 1:55 PM / 14 days ago

PRECIOUS-Gold prices ease in choppy trade as dollar, stocks advance

4 Min Read

    * Weaker dollar and lower U.S. treasury yields support
    * Gains capped by equities' advance
    * GRAPHIC-Gold/silver ratio: tmsnrt.rs/2sSS4Uk

 (Recasts; updates prices, milestones, market comment; adds
byline, NEW YORK dateline)
    By Chris Prentice and Maytaal Angel
    NEW YORK/LONDON, July 13 (Reuters) - Gold retreated from
earlier gains on Thursday as the U.S. dollar turned higher and
global stocks gained on upbeat data, even as investors wagered
that policy tightening in the United States would be glacial at
best.
    Denting gold's safe-haven appeal, the MSCI world index hit a
record high for the fourth time in less than a month as
investors took Yellen's remarks as a green light for
risk-taking.            
    China posted stronger-than-expected June trade figures,
bolstering the U.S. dollar, which advanced against a currency
basket       .             
   The greenback earlier hit its lowest since last October after
U.S. Federal Reserve Chair Janet Yellen struck a less hawkish
than expected tone in testimony before Congress on Wednesday.
      
    A stronger U.S. currency weighs on gold, making the
dollar-priced commodity more expensive for non-U.S. investors.
      
    Spot gold        was down 0.1 pct at $1,218.59 per ounce  by
1:51 p.m. EDT (1751 GMT), off Monday's near four-month low of
months at $1,204.45 this week.    
    U.S. gold futures for August delivery         settled down
$1.80, or 0.15 percent, at $1,217.30 per ounce. 
    The U.S. economy is healthy enough for the Fed to raise
interest rates, though low inflation and a low neutral rate
could leave the central bank with diminished leeway, Yellen said
on Wednesday.             
    "Without inflation pressure, Yellen won't likely do anything
until 2018. The gold market can take a breather," said Eli
Tesfaye, senior market strategist for brokerage RJO Futures in
Chicago.
    "The $1,200 (per ounce) level is good support, but it could
be tested," he said.
    The comments, part of Yellen's two-day monetary policy
testimony, prompted a rally in treasuries, with yields on
two-year notes            falling. Lower yields reduce the
opportunity cost of holding non-yielding bullion.
    "The consolidation around $1,220 should be viewed as
positive for near-term pricing, with the relatively light long
positioning instilling confidence in the market that the metal
is open to further top-side moves," MKS said in a note.
    "Geopolitical concerns out of the Korean peninsula are
likely to supportive for the broader precious complex, while the
very fluid Trump-Russia collusion story continues to create
uncertainty across markets."  
    Silver prices        fell 0.94 pct to $15.73 per ounce.
    "(T)he gold/silver ratio is approaching 80, meaning that
silver is very inexpensive compared with gold," said Gregor
Gregersen at Singapore-based Silver Bullion Pte.
    Palladium <       fell to 1.24 percent to $852.80 per ounce
while platinum        was down 1.58 percent at $902, giving back
nearly all of the previous day's gain, the largest since June 2.

 (Additional reporting by Nithin Prasad and Arpan Varghese;
Editing by Marguerita Choy)
  

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